Advice for purchasing a property with a partner / family member

[Hayley Quint]

Hi all - thank you for any advice in advance! I am new to the forums and have already learned so much from everyone's contributions.

Here is the situation: My brother is eager to use his savings to invest in a house hack, but is unable to to do this on his own. He asked my husband and me to partner with him (yes, we understand risks of investing with family), and we are scratching our heads as how to best set it up.

A few details:

1. My brother has enough in savings for a downpayment, but is finishing up college and has no W-2 right now. He is ideally putting 10% down if he can do a primary mortgage loan. I would be co-signing with my brother for proof of income (is this possible?). I trust my brother and we plan on outlining & signing on the partnership in rich detail. This would be a house hack for him, where he would be living in one of the units/bedrooms of either a SFH or a multi-family.

2. My husband and I have experience with rental properties, so will be teaching him a lot as well as doing most of the work for the time being.

3. My husband and I would not be putting anything down to begin with (we just purchased another property), and are open to putting an equal amount into the house within the year (including interest), or something else to make the investment into the house equal (ie, rehab $ if we go the rehab route) for both parties.

4. We would like to help my brother out here, teach him about rental properties, but also want it to be appropriately equitable and financially advantageous for the both of us.

Our goal: We would like to help my brother out here, teach him about rental properties, but also want it to be appropriately equitable and financially advantageous for the both of us.

A few of my questions:

1. Would we be able to purchase this house (if I co-sign) as a primary mortgage for my brother? (He would be living there, we would not be)

2. Since he wants to house hack this and ideally pay zero to little rent out of pocket because tenants would covering mortgage, what would be a fair equity split on the house if we both invest the same amount into it?

3. If we both put forth an equal investment (down payment), what is the process of “buy out” and how does this work? As in, if we want to buy him out/pay him back in a year or two so that the property is in our name…

4. I am sure I am not considering many things here, any insights into how to best do this as a partnership (with a hint of love to help my brother) would be greatly appreciated.